Publication Date

January 2002

Publication Details

Hodgkinson, A and McPhee, P, SME Information Sourcing for Innovation and Export Market Development: From Local or External Networks?, Working Paper 02-08, Department of Economics, University of Wollongong, 2002.


A survey analysis of innovation information and input sourcing of New South Wales regional exporting firms indicates that the majority of regional exporters were small to medium sized enterprises (SMEs). The analysis shows that these SMEs have been able to establish their own extensive information linkages into the international economy. Consequently, the need to assess and develop the benefits of linkages between small and large firms is not highly significant within the New South Wales regions. The analysis indicates that international networking by SMEs brings knowledge to the regions, which facilitates intra-firm learning. However, it suggests that SME’s local or regional linkages are relatively underdeveloped, as a source of new knowledge for innovation activity. This is in contrast to the main body of economic literature, which argues that small regional exporters utilize local networks as a major input into their success. This research identifies intensification in the usage of regional networks as one means of improving SME performance in more remote regions. The analysis also indicates that a two-way effect results by the diversity of regional SME export sector base. Firstly, it restricts the client-supplier relationships preventing closer industry specific collaborations but secondly, it can be advantageous in that it restricts competition between regional exporters. This creates conditions allowing some information sharing regarding the opportunities and ways of entering overseas markets, which do not affect the competitive position of the mentoring firm. In concluding, the paper argues that the basic requirements for regional learning development are in place but requires an increase in the interaction intensity between local SMEs in order to achieve a higher level of collaboration and knowledge sharing.